the top 5 automotive oem's and the top 10 lemons in the chinese market (english language)

The “Top-5“ Automotive OEM's and thetop “10 Lemons“ in the Chinese Market.

Author: Claus Winzer - Automotive Senior Design Engineer / Automotive Industrial Consultant - 2014

An examination of the Chinese production capacity expansion in the automotive industry for the period from the year 2014 to 2018.

A detailed analysis of the "Top 5" car manufacturers in the Chinese market and those that increase capacity.

o Which are the 5 Top OEM’s ?o Why and Where ? o Total Investment ?

A detailed analysis of the 10 car manufacturers in China with the worst sales result in the automotive market.

o What is their manufacturing capacity situation ?o What do these manufacturers wrong ?


Table of Contents

The "Top 5" automotive manufacturers in the Chinese market Page 04

The new planned production sites of the "Top 5" car manufacturers in the Chinese market Page 05

Chinese car sales and sales forecasts for the years 2014 - 2018 Page 06

Planned total investment of the "Top 5" OEM’s in China in the years 2014-2018 Page 07

The Volkswagen Strategy “Go West and Go South” Page 08

The 10 automotive manufacturers in China with the worst sales results in 2013. Page 09

What in the Chinese market do these automotive manufacturers wrong? Page10 - 11


The "Top 5" Automotive Manufacturers in the Chinese Market


Urumqi

The "Top 5" car manufacturers in the Chinese market with new planned production sites to increase production capacity in the years from 2014 to 2018. (without existing manufacturing sites)

Chongqing

Shenyang

ShanghaiWuhan

Changsha

Foshan

Zhengzhou

Ningbo



Chinese Car sales and forecast for the years 2014 - 2018

For the next five years and according to general sources a growth forecasts in China is expected.

The expected growth in 2014 will be between 5 to 8%. In general it is estimated, the Chinese automotive industry in 2014 will grow to 24 million vehicle units.

The projection of growth to the year 2018 will reach about 30 to 35 million vehicle units per year.

Specific sales plans made by Volkswagen for the very important market in China were presented. By 2018, Volkswagen will increase the production capacity to 4 million vehicles per year.

The "Top 5" Car Manufacturers in the Chinese Market

Chinese car sales and sales forecast

Veh

icle

Sal

es (u

nits

in M

illio

n)

Glo

bal Marke t share of sal es revenue

Until the year 2018, the Volkswagen Group will invest up to 17 billion US$ into four new Chinese automotive production plants, in Urumqi, Changsha, Foshan and Ningbo.

In the years from 2014 to 2018, General Motors will invest 12 Billion US$ in China, during this time, five new production sites will be established in China.

Hyundai will expand it’s production to two additional sites in Urumqi and Chongqing, Nissan will receive a further production site in Zhengzhou, and Ford will expand its existing locations in China.

Planned total investment for the "Top 5" in China in the years 2014-2018


The "Top 5" Car Manufacturers in the Chinese Market

Bill

ion

(U

S$)

The Volkswagen Group in China needs to show greater presence in China, strengthen its excellent national reputation and following regional growth trends.

Volkswagen wants to break the dominance of Japanese car manufacturer in the south of China, the strategy "Go South" and "Go West “ has been defined, to “Divide and Conquer” the southern and western regions of China.

Measures of these strategies appear in the current construction of the new production facilities in Changsha, Foshan, Ningbo and Urumqi.

The Volkswagen Strategy "Go West and Go South"

Existing Production Sites

New and planned Production Sites


The 10 automotive manufacturers in China withthe worst sales results in 2013.

1. Tianqi Motor 1026 Vehicles

2. BAIC BJEV 1677 Vehicles

3. Changan PSA Automotive 2552 Vehicles

4. Zhongxing Automotive 7757 Vehicles

5. BAIC Motor 7867 Vehicles

6. Foton 7899 Vehicles

7. Sichuan Automotive 8510 Vehicles

8. Fujian Daimler 9496 Vehicles

9. Jonway 10230 Vehicles

10. SG Automotive 11736 Vehicles


Customers Point of View

• Unknown car manufacturer or car manufacturer with bad reputation.

• Loss of product credibility due to the low product price.

• The customer opinion is: "you get what you pay”.

• Loss of confidence and trust in own local Chinese made products through bad experiences.

• Foreign made products and manufacturers enjoy greater prestige and confidence.

• Similarity with existing well-known car brands give the appearance of a cheap copy.

• Product style not fashionable, ugly or “an old sock”.

• Missing or a lack of innovations that can make the product interesting.

• Wrong, to small or not consumer oriented product portfolio.

• In large part the Chinese customer opinion is, "you are, what you have“. Chinese also enjoy “showing off “.

What in the Chinese market do these manufacturers wrong?


Company Internal Failures

• Poor or no sales strategies, no sales promotions, missing or bad product advertisement.

• Missing or bad public and customer relations.

• Incompetence and lack of decisions within the corporate management .

• Poor or wrong choice of component suppliers (low quality of vehicle components) .

• "Follow the Market Leader" mentality among decision-makers.

• Lack or no core technology, No or insufficient investment in research and product development.

• No or missing benchmarking and product-finding process.

• Fear of losing face.

• Lack of self-criticism.

• Fear to forward positive criticism to supervisors (cultural issue).

• Organisational blindness.

• "I do not care" attitude of the company employees.

• Corruption and favoring.


What in the Chinese market do these manufacturers wrong?

the top 5 automotive oem's and the top 10 lemons in the chinese market (english language)

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